OPEC agrees to trim production

The Organization of Petroleum Exporting Countries (OPEC) has agreed to cut worldwide oil production while simultaneously raising official quotas for the 11-nation cartel, aligning them with actual out

The Organization of Petroleum Exporting Countries (OPEC) has agreed to cut worldwide oil production while simultaneously raising official quotas for the 11-nation cartel, aligning them with actual output levels. OPEC’s ceiling is now set at 1.3 million barrels per day.

The decision to cut production was authorized at an OPEC gathering on December 12 at the Group’s Vienna headquarters. A two-tier proposal, drafted by OPEC linchpin Saudi Arabia, recommended cutting production by as much as two million barrels per day (bpd) and at the same time raising output quotas by up to 1.5 million bpd.

Seeking to dodge a price slump next year, the OPEC set official production targets at 21.7 million bpd. However, the cartel has been finding it increasingly difficult to rein in its quota-busting members and OPEC’s actual November output—excluding sanction-hit Iraq—totaled 24.1 million bpd. Overproduction is undermining the group's goal of keeping prices at around $25 a barrel. — (menareport.com)